Nina's Reading Blog

Comments on books I am reading/listening to

Posts Tagged ‘behavioral economics’

The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home

Posted by nliakos on May 9, 2013

by Dan Ariely (Harper 2010)

The sequel to Predictably Irrational is similar to its predecessor but focuses more on the positive aspects of irrational behavior, as the title says. Part 1, “The Unexpected Ways We Defy Logic at Work,” covers why the larger the bonus, the worse we perform (especially at mental tasks); how we work not only for pay but also for meaning, and if our work is meaningless or unappreciated, our desire to do it dissipates; the IKEA Effect, or how we love what we create ourselves; the Not-Invented-Here Bias, which is basically the IKEA Effect of ideas and inventions; and revenge, which may be one of our more basic needs (when we get it, the pleasure/reward center of the brain becomes active). As with the first book, this is about the same things I am learning about in Professor Ariely’s MOOC, A Beginner’s Guide to Irrational Behavior, so it all seems very familiar when I read it. I am not totally sure why these things constitute the upside!

Part 2, “The Unexpected Ways We Defy Logic at Home,” focuses on the ways we adapt to both positive and negative things in our lives; whether the same people are attractive to everybody, and if so, how the “aesthetically challenged” among us (who, me??) deal with having to settle for someone possible less attractive than they would have liked; how online matchmaking works (and fails to work); why we are more likely to donate to a person than to a generic cause (a starving child vs. an organization that tries to help millions of starving (but faceless, nameless) people; and finally, how a decision made under the influence of positive or negative emotions can have a very long-lasting impact on our lives. In the closing chapter, Ariely reminds his readers that we are not the objective, rational, logical beings we like to think we are, and since our intuitions often fail us, we should “test everything”–not, perhaps, a very realistic piece of advice, but at least we should try to remember not to trust our gut feelings.

I’ve already begun the third book in the bundle, The (Honest) Truth About Dishonesty. Look for a post about that one soon.

Posted in Non-fiction | Tagged: , , , , , , | Leave a Comment »

Predictably Irrational: The Hidden Forces That Shape Our Decisions

Posted by nliakos on April 30, 2013

by Dan Ariely (original publication date 2008; revised and expanded edition published in 2009; Harper-Collins)

This book has been on my to-read list for a couple of years–so when I learned that Dan Ariely, a professor of behavioral economics at Duke, was offering a massive open online course (MOOC) called “A Beginner’s Guide to Irrational Behavior,” I hastened to enroll, discovering to my dismay that it was a six-week course already in week four–or five–I’ve lost track. So quite irrationally, I decided to enroll anyway, and I also ordered Ariely’s Irrational Bundle of this and two other books for my Nook. Then I spent all of last week trying to listen to all of the lectures and take the lecture quizzes, while at the same time reading the book (mostly on the bus). Finally, this morning, I was caught up and beginning Week 6 with everyone else. (I confess I am not trying to complete the readings or the quizzes based on them or to complete the writing assignment–but since I am not looking for credit, that’s okay.) The course and the book complement and reinforce each other; they are about the same things and describe the same experiments, so I often find myself wondering if I have already read a chapter or listened to a lecture, because the material seems so familiar! Sometimes I even feel like I’ve encountered the same material three times (perhaps because I have already started the second book, The Upside of Irrationality)!

Basically, the idea is that classical or “rational” economics presumes that people make rational decisions, whereas behavioral economics presumes no such thing; as Ariely points out, our decisions are often irrational and non-intuitive. For example, we get stuff we neither want nor need if it’s free; we spend lots of money on other stuff for no good reason; we hate to lose money more than we love to get it; the higher the bonus, the worse we perform; we marry for all the wrong reasons; and so on. Some things were surprising; others were not. The book is written in a clear and interesting way. The lectures are even better! I am really enjoying the MOOC.

Posted in Non-fiction | Tagged: , , , | Leave a Comment »